L’Oreal’s Spending Boost on Digital Marketing is Paying Off Big Time

L’Oreal USA’s decision to increase spending on digital marketing by allotting as much money in 2011 as the brand did in 2009 and 2010 together has resulted in enormous dividends. The company’s sales jumped 7.9 percent overall in the first half of the year and increased 5.4 percent for the 52 weeks ending August 12 in food, drug, club, mass, dollar, and Walmart stores. These impressive sales gains can be attributed to the brand’s move to devote more than 10 percent of their marketing spend to digital, along with their increases in overall marketing to rank ninth in U.S. advertising spending last year. AdAge.com recently interviewed L’Oreal USA CMO Marc Speichert, whose focus on pursuing more digital opportunities has generated strong sales and even stronger support for the brand’s new digital marketing direction.

Since his arrival in 2010, Mr. Speichert has made it his mission to increase the company’s digital marketing abilities and opportunities while remaining focused on all aspects of the brand’s marketing.

“Everyone is recognizing digital is impacting media, the whole path to purchase and how digital is changing that dynamic, said Mr. Speichart. “The one thing that’s interesting is that we are, in partnership with our TV and print partners, starting to understand the digital linkage, or how digital is starting to impact [the effectiveness of] traditional TV and print.

He believes that digital is at the epicenter of every element of marketing today. As a result, digital marketing is transforming the way that brands develop creative, as well as their perspectives on retail, and how marketers must think about product lines and business models. At L’Oreal, digital is serving as a major catalyst for the way the brand’s marketing dollars are being distributed.

This digitally centric outlook has led the company’s development of a beauty TV channel on YouTube which has become the leading partner channel on the online video platform. Mr. Speichart feels that digital marketing covers many steps of the path to purchase and has been so pleased with the channel’s ROI that he is seriously considering additional YouTube channel opportunities.

“It’s an awareness play, because when people get on that channel 100% of the advertising is L’Oreal advertising,” he explained. “But, importantly, we also provide them with a humongous number of how-to videos, which gets into the evaluation phase. It’s a very nice mix of both.”

L’Oreal’s newfound passion for driving digital innovation and media led to their launch of The Next Fund in 2011. This is a corporate budget focused on sharing innovation that is completely protected from budgetary cuts. The Next Fund has enabled L’Oreal to start working with digital media companies to develop unique online initiatives that capture more search traffic. So far, the fund has financed some highly successful online efforts for the brand and has gained strong momentum as a way to continue to explore the limitless directions of digital marketing and media

To learn more about the latest trends in digital marketing, contact MDG today at 561-338-7797, or visit www.mdgsolutions.com.

MDG, a full-service Florida marketing firm with offices in Boca Raton and New York, NY, specializes in developing targeted Internet marketing solutions, exceptional creative executions and solid branding and media buying strategies that give clients a competitive advantage. Our core capabilities include branding, logo design, creative, digital marketing, print advertising, mobile marketing, media planning and buying, TV and radio, online video, website design and development, content marketing, social media marketing, and search engine optimization (SEO).